Tuesday, January 8, 2013

10 BIGGEST ERP SOFTWARE FAILURES OF 2011

With the year drawing to a close, one thing seems abundantly clear: There are still an awful lot of ERP and other software projects running off the rails out there.

Software project failures are no fun for anyone involved. They lead to piles of wasted money and effort, heaps of accusations and recriminations, and even to lawsuits. Here's a look at some of the highest-profile problem projects to surface this year.

UK government scraps the 12 billion National program for IT in the NHS

In September, U.K. officials pulled the plug on what is considered to be the largest public IT project of all time, an attempt to provide electronic health records for all of the country's citizens.

The sprawling effort was begun in 2002 but failed to produce a workable system, despite massive spending outlays that have been estimated at about 12 billion (US$18.7 billion).

The U.K.'s Major Projects Authority concluded the project was "not fit to provide the modern IT services that the NHS needs."

"The higher they fly the farther they fall," said Michael Krigsman, CEO of the consulting firm Asuret, which helps companies run successful IT projects. "They tried to impose a centralized solution onto just an enormous geographic and political base. It was a massive undertaking filled with political differences and technical failures, and in the end it serves as an example of what not to do."

New York City's CityTime project

Fallout continued this year over New York's massive CityTime payroll system project, which has been wracked by cost overruns and a criminal probe into an alleged kickback scheme involving former employees of systems integrator SAIC and a subcontractor, TechnoDyne.

CityTime originally had a $63 million budget, but costs since skyrocketed astonishingly, with total estimates reportedly reaching $760 million.

In June, officials indicted TechnoDyne executives Reddy and Padma Allen. Others, including a number of former SAIC employees, have also been charged.

New York officials are seeking to recover money paid to SAIC. Earlier this month, SAIC said it had set aside a $232 million loss provision in connection with the case.

SAP project woes impact Ingram Micro's profits -- twice

In April, massive technology distributor Ingram Micro announced that problems with an SAP project in Australia had made a significant dent in its first-quarter profits

Net income stood at $56.3 million, a drop from $70.3 million in the same quarter the previous year, Ingram Micro said at the time. The shortfall was "primarily attributable to difficulties transitioning to a new enterprise system in Australia," it said.

Ingram Micro went on to stress that the system would provide a great deal of value and efficiency once in place. However, it also warned that its financial results may yet again be impacted by the project's issues, a premonition that proved true.